This came even as Public Service Minister Dalmas Otieno told the Parliamentary Committee on Health that is probing alleged irregular allocation of funds to the two health facilities by the national insurer that the contentious medical scheme should continue despite the hiccups experienced.

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Interim Chief Executive Officer Adan Adan who accompanied Medical Services Minister Anyang’ Nyong’o to the Committee hearings said they had frozen funds for the second quarter of the scheme implementation.

The comprehensive outpatient and inpatient medical scheme for Civil Servants began in January with the first quarter ending in March. The scheme is supposed to run until June when the government is expected to renew the contract for one year.

However, the Public Service Minister who is in charge of civil servants told the Parliamentary Committee on Health that although there were weaknesses in service delivery for the outpatient scheme, the issues could be addressed as it was being implemented.

“It is the regulating authority that should have anticipated this process (upsurge of private clinics) and stayed up to date and I realised the Medical Practitioners and Dentist Board meets once in three months, which is a system too weak for a project of this magnitude. That is where systems began to break down,” the minister who appeared before the Committee on Tuesday morning explained.

The major challenges experienced in the first quarter of implementation, he said, were lack of drugs and non-existent facilities.

“We would have expected the quality assurance department to be visiting non-stop all these facilities, otherwise private sector initiatives to exploit this programme where Sh8 billion of new resources is coming to the health sector has run out of the administrative capacity of both the Ministries of Medical Services, Public Health and the National Hospital Insurance Fund,” Otieno said.

“So our attitude had been, keep abreast of progress and address weaknesses concurrently in the shortest time possible,” he added.

He further told the Parliamentary Committee that civil servants had no issue with the provision of inpatient, group life and last expense services which have also been underwritten by the National Hospital Insurance Fund.

“All these components have separate premium quotation so we are paying for them differently and we are happy with the service delivery of those three so far,” he said.

On the debate about allocation of health facilities where civil servants were required to seek services, Otieno explained that they made an arrangement with the NHIF to make preliminary allocation of health facilities to civil servants based on information provided by the ministry.

This, he said, was to ensure the roll out in the first month and after that civil
servants would be allowed to change their facilities.

“We did not participate in the allocation of our members, that was done by the National Hospital Insurance Fund but the contract we signed with them allowed our members choice every three months to change the health care service provider,” Otieno said in response to a question asked by Health Committee Chairman Robert Monda.

“What was in the contract that you signed? Were you committing people and money where you did not know what they will encounter?” Monda probed further.

“Mr chairman, I have given you a copy of the contract and it is very comprehensive. If managed as contracted, this would be an excellent service. It is NHIF that has run into problems doing so and we would have no complaints if NHIF managed this scheme in accordance with the contract. There were no flaws in negotiating the contract at all we got what we wanted in fact we got better,” Otieno answered.

He explained that the outpatient scheme which is in question could have been managed in two different ways – either by computer software or through the capitation method.

“It could have been done on an individual basis based on the computers software which is available. What it would mean is every employee would be entered in a computer system and the benefits for outpatient, inpatient, group life, death benefit and last expense figures would go into that computer,” he explained.

“If you go to any health facility with a card of membership, once you swipe your card, the system will tell you how much outpatient money you still have up to your limit,” he added.

But the problem with this kind of system, he pointed out, was that once employees exhausted their outpatient benefits, they would seek admission in health facilities so as to spend what is provided in the inpatient cover.

“So even that route would have fraudulent outcomes that would have to be plugged,” he told the Committee.

Medical Services Minister Anyang’ Nyong’o who appeared separately before the committee said public hospitals lacked capacity to handle the scheme but the Ministry was in the process of upgrading them.

“The reason why we are undertaking this rehabilitation project for our hospitals is to respond to this neglect and to make sure that they deliver services efficiently and cost effectively. This particular contract gave the civil
servants a choice between the private sector and public and all I am saying is that we should be able to compete with the private sector,” Nyong’o said.

He also defended the capitation method which the NHIF is using to roll out the outpatient scheme saying it has been supported by a Sessional Paper no.2 of 2004 which was done prior to the initiative for Comprehensive Social health insurance scheme in 2005 that flopped. He said capitation method also reduced the chances of wastage over servicing as could be the case in fee for service.

The capitation mode of payment is where a health facility is given a fixed amount of money by the insurer to offer services to a specific number of people.

“The only disadvantage with the system is potential in reduction for quality care especially if tangible and realistic service level agreements are not implemented. It could also lead to exclusion of patients providers view as high risk.”